Money's Fatal Flaw

       When the government deficient spends it creates money to cover the deficient. If that is true, why is the government in debt? Why doesn't the government just create enough money to pay off the debt? The truth is that the government does not create money. All money is created by banks. When the government deficit spends the privately owned Federal Reserve Banking System (Fed) creates the money and loans it to the government. It is simply an electronic accounting entry in the government's checking account. Then the people are taxed to pay interest and principle back to the privately owned Fed who created the money at no expense. Money is also created by local banks through the fractional reserve system when loans are made to individuals. Most of us believe that banks take in savers money at one rate of interest, loan it out at a higher rate of interest, and make a profit off the difference. They do that. However, they also create new money when making loans through the fractional reserve system. All money comes into existence by being loaned into existence, at interest, by banks and must be paid back to the money creator with interest. The money supply must be constantly expanded to repay loans as they come due. As the money supply expands the value of the money falls. If new money creation is slowed, there will not be enough money available to repay loans as they come due. If the money supply is expanded the money looses value and anyone with savings finds that their savings will not buy as much as it did when it was earned. This is the fatal flaw in our money system. As the money supply is expanded debt grows, and requires further expansion of the money supply to repay loans as they come due. It is a vicious circle of continuous inflation with cycles of recession if the money supply is not expanded rapidly enough. The inflation steals the savings of senior citizens, and the ever increasing debt places future generations in debt bondage.  

            What is the solution? If the government created the money directly, and spent it into existence the people could be supplied with a debt free supply of money to carry on commerce. Then with the proper balance of taxation and government money creation the nation could have a money supply that functions as a stable store of value. Local banks could then take in savers money at one rate of interest and loan it out at a higher rate of interest and make a profit off the difference. There would be no need for the Federal Reserve Banks. The international bankers that control the Fed and the economies of the world do not like this solution. It would greatly reduce their wealth, power, and control. They will use every media they control to demonize this solution and tell why it will not work. The system we now use gives too much power to too few people, and concentrates the wealth of the nation in too few hands. It is nothing more than a very sophisticated and devious form of theft.

Charles Fuqua is the author of God's Law - The Only Political Solution. He is available to speak at churches and any other group setting. GodsLawForAmerica.com, CharlesRFuqua@gmail.com, 870-612-3570.

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